Golden Achievers: The All-America Research Team Hall of Fame

At first blush the analysts who enter Institutional Investor’s All-America Research Team Hall of Fame this year — David Adelman of Morgan Stanley, Andrew Lazar of Barclays and Andrew Steinerman of J.P. Morgan — appear to have little in common. They work at different firms, cover different sectors and came to equity analysis via different avenues. Upon closer examination, however, a common trait emerges: Each discovered a fascination with the stock market fairly early in life.

Adelman’s interest in equity research was kindled at home: His father, Lawrence, covered the beverages, food and tobacco sectors for Dean Witter Reynolds — and landed on the All-America Research Team 28 times between 1978 and 1996. “My father was by far my most significant mentor,” says Adelman, 46. “We worked together very closely for many years and, simply put, he taught me how to be an analyst.”

VIDEO Hall of Famers talk to Institutional Investor Senior Writer Julie Segal about their careers.
Video: Andrew Steinerman J.P. Morgan	Video: Meredith Adler Barclays
Video: Andrew Lazar Barclays

Adelman earned a bachelor’s degree in economics at the University of Chicago in 1989, then followed that up with an MBA in finance and business policy from the university’s Booth School of Business in 1990. Upon graduation he received offers from two sell-side firms. “I chose to go to Dean Witter Reynolds, to work with my father,” he says.

In 1997, Dean Witter merged with Morgan Stanley, and Adelman found a second mentor: Mayree Clark. “She was one of my earlier research directors at Morgan Stanley and had an important influence during the formative period of my career,” he says. “Mayree had extremely high expectations, and she was very motivating.” (Clark left the firm in 2005 and is currently chairman of Detroit-based Ally Financial’s risk management and compliance committee.)

Also in 1997, Adelman debuted on the All-¬America Research Team, as a runner-up in Tobacco; he led the sector for the first time in 2003 — and has done so every year since, for a total of 16 appearances and ten first-place finishes to date.

“The tobacco industry is absolutely fascinating,” Adelman says. “The legal, regulatory, political and public-policy complexity of the sector — coupled with its high profitability and significant cash flow — has made it an extremely interesting industry to analyze. I also feel tremendously lucky to have analyzed the sector through an extended period of very complicated and high-stakes litigation — it has never been boring! — and to have been generally bullish throughout.”

There is another positive to the job: “I have found it extremely rewarding to mentor developing analysts,” he adds.

The tobacco sector seems to be a hot spot for coaching. “My most influential mentor was and is Michael Branca,” says Barclays’s Lazar of his colleague who covers beverages and tobacco. (Branca is also a fixture on the team, having ranked 20 times since 1996.) The two men have worked side by side for 17 years.

Lazar first became interested in stocks while earning a bachelor’s degree in economics and finance at the University of Pennsylvania, but upon graduating he took a job as a strategic consultant at Greenwich, Connecticut–based Mars & Co. “I worked on projects for large consumer-staples companies, and that’s where I got my first taste of the consumer-products world,” he says. Lazar left that job to enroll in New York’s Columbia Business School, where he earned an MBA in finance, then went to work in the New York office of Unilever, one of the world’s largest consumer-goods companies.

But the idea of working on Wall Street continued to hold a strong appeal, and in 1995 Lazar joined Lehman Brothers as a research associate covering food stocks. “Coming to the sell side married my education and interest in the equity markets with my consumer-products industry background,” he explains.

Lazar, 46, debuted on the team in 2001 as a runner-up in Food, rose to second place in 2002 and, like Adelman, climbed to No. 1 in 2003 — and hasn’t budged since, even though he has changed firms along the way. In 2008, Barclays acquired the North American operations of Lehman Brothers Holdings after that firm collapsed into bankruptcy, a casualty of the subprime mortgage crisis.

“While much has changed in the sell-side arena, one thing has not: A sell-side role is among the best preparation I can think of for a variety of other roles in the broader financial services space,” Lazar observes. “Building a skill set to be able to evaluate companies and industries, both financially and strategically, is applicable to many different positions.”

If he were to take a different post, what would it be? “I’d still like to be involved with the packaged-goods industry, perhaps in a strategic planning or investor-facing role,” he muses. “Down the line a teaching position would be fun as well.”

Not that Lazar has any immediate plans to forsake equity analysis. “The best part of this job is the relationships I’ve been able to develop with so many smart people, both at the companies I cover and on the buy side,” he says. “I am challenged at every step and learn as much from my interactions with clients as they do from me.”

J.P. Morgan’s Steinerman offers a similar view. “There are always different dynamics going on and new subjects to learn about,” he says.

Steinerman, 43, began his professional life as a certified public accountant after receiving a bachelor’s degree in business administration from the University of Michigan in 1990. He decided to change course, earned an MBA at the University of Pennsylvania’s Wharton School in 1995, then joined Salomon Brothers, where he worked as an associate covering transaction-processing companies.

“I wanted to use my skills as a number cruncher in a role that was more dynamic,” he explains. “I have loved stock analysis since I was in college.”

He moved to Bear, Stearns & Co. in 1998 and debuted on the team the following year, in third place in Business Services/Staffing. (Two years later the ever-expanding sector would be renamed Business & Professional Services, and in 2009 it became Business, Education & Professional Services.) He led the category for the first time in 2000 and has made the team every year since, for a total of 14 rankings and ten first-place finishes.

In March 2008, JPMorgan Chase & Co. announced that it would acquire Bear Stearns Cos. — another victim of the subprime crisis — and in the course of interviewing with his potential new employer, Steinerman met someone who would have a profound impact on his career: Noelle Grainger, then–deputy head of U.S. equity research, whom he describes as “an incredible coach to me and my fellow J.P. Morgan analysts. She creates an entrepreneurial environment with guidance and resources.”

Grainger, now head of Americas equity research, remembers that first interview. “I met Andrew in April 2008, just after JPMorgan announced the acquisition of Bear Stearns, and we were faced with making very difficult decisions about talent,” she recalls. “Andrew’s reputation as the best analyst in the business-services sector preceded him, but his professionalism and personality under the circumstances really stood out. Andrew is an enthusiastic team player who prides himself on knowing his industry, companies and investors better than anyone else.”

That’s a fitting description for all members of the Hall of Fame, which was introduced last year, the 40th anniversary of the All-America Research Team, to honor those analysts who have earned ten or more first-place finishes in their respective sectors. Of the 15,246 individuals who have made the team since it was introduced, only 52 — or roughly one third of 1 percent — have so impressed investors that they meet the eligibility requirements. • •